Speakers: Ileana Resendez, Heifer; Cheryl Pinto, Ben and Jerry’s; Jefferson Shriver, CRS
Living Income key points:
- Incorporating a Living Income (LI) approach is a much slower initial process with partners, but in the long run it does lead to a structural focus on LI.
- It is not meant as a social engineering approach. The awareness of the issue and structural tracking is meant as a catalyst for change.
- There is a mis-match with short donor funding cycles and longer LI timelines
The Ben and Jerry’s work on living income comes out of their Producer Development Initiative (PDI). The goal is for linked prosperity for farmers, trade and industry. For farmers this translates to increased production and an increase of their share of value captured.
The LI approach is a framework for identifying producer needs that results in the design of appropriate responding projects. Three elements are required: productivity raising work, price agreements (beware anti-trust issues!) and product package for LI.
- When should a benchmark be taken to assume a standard commodity price? Commodity prices fluctuate wildly.
- What indicators should be considered as part of a LI and how do you put them into context? For example, Heifer works with a “designed diet” for the whole family, which is nutritious and culturally acceptable. B&J uses proxy community vitality indicators.
Living income indicators can only track the potential for a living income. It is an individual choice what income is allocated toward.
Buyers respond to LI because they see it as an investment in the resilience of their supply base.
Impact on product costs depends on the value of the ingredients in the final product. For B&J they find that the products for which LI benchmarks are being applied have little impact on overall cost price, because they are minor ingredients. They also don’t allow suppliers to mark up on the LI bonuses paid.
B&J is trying to drive a wider discussion on the need for LI.